Healthy Policy

What the new numbers say

(cross-posted from tpm)

The Administration released a new report yesterday that it enrolled an additional 1.9 million beneficiaries in Medicare Part D last month, bringing the total number of enrollees to around 27 million.  But the many mechanisms through which seniors receive prescription drugs is deceiving, so I'm going to flush out the numbers a bit further.  (I'm mostly working from this Kaiser issue brief, refer to it if you want to get really in depth.)  Because while 27 million enrollees receive coverage somehow, only 7.2 million of the 22.9 million eligible to voluntarily sign up for coverage have now done so.  And of the 27 million HHs is citing, only 26% of the enrollees  have voluntarily signed up for stand-alone coverage.  Further, the polling on Part D is getting worse.

The first thing you need to know to put these numbers in context is that there are 43 million people eligible for drug coverage under Medicare Part D.  So with the current enrollment numbers, around 63% of Medicare enrollees now have prescription drug coverage coming from somewhere.*
(*somewhere is key here -- 11.1 million enrollees get their drug coverage from a source other than Medicare.)

Next, you have the "dual eligibles" (those enrolled in both Medicare and Medicaid), who were automatically enrolled in a plan.  There are 5.8 million dual eligibles.

Drowning Medicare

Cuts outlined in Bush's FYE '07 are specifically targeting Medicare:

The fiscal year 2007 budget that President Bush has proposed would increase the federal deficit by $35 billion this year, with proposed spending reductions for Medicare, Medicaid and other programs expected to offset about one-third of the cost of his other proposals, according to a Congressional Budget Office report released on Friday, the New York Times reports (Andrews, New York Times, 3/4). According to CBO, the budget proposal over five years would reduce spending for Medicare by $37 billion and for all entitlement programs by $56 billion. Over 10 years, the budget proposal would reduce spending for Medicare by $138 billion and for all entitlement programs by $184 billion, according to CBO (Cohn, CongressDaily, 3/6).

There's no reason why Medicare cuts should equal 75% of entitlement spending cuts, except to piss people off.  And while this policy wonk is pretty miffed, I'm not the target audience, nor are other Medicare and public program supporters.  No, the attack is meant for physicians and hospitals.  It's meant to start agitation and send shock waves through the patient population that declare public programs undependable.

Well, yes, they are when you don't fund them adequately.  Or design them properly. 

Want oxygen?

Medicare is asking patients to negotiate with providers for the cost of their treatment:

The administration contends that the rental payments now are a waste of scarce government funds, and that the situation has reached a point where relationships must be altered. Instead of renting, Medicare would in effect buy the equipment for a beneficiary, who then could bargain for services -- oxygen supplies and maintenance -- separately on the basis of service and price.

Let me ask something here.  If small businesses can't negotiate rates, how are individual patients going to?   

I'm well aware of the fact that the new health beat in the White House is Consumer Directed Health Care.  But please spell out the logic behind this one.  The mandate of Medicare is to pay for the elderly's health services.  It isn't to buy equipment for them then ask them to lay out in the cold neogiating price with medical device providers.

Congressman Bill Thomas takes a stab at the logic:

Patients will now "own the means of delivery," says House Ways and Means Committee Chairman Bill Thomas, and the industry will have to compete more to serve them. "Remember Marx -- own the means of production," the California Republican adds with a grin.

Methinks this is not what Marx intended.  No, this is not what Lyndon Johnson intended.  And this is certainly not what Medicare beneficiaries bargained for when they started paying into Social Security forty years ago.

Medicare Conflict of Interest

The Washington Post reported on a recent realization last week -- that CMS (Center for Medicare and Medicaid Services) officials in charge of over $300 million in contract awards for quality improvement organizations (QIOs) enjoyed more than their share of trips to beach and mountain resorts on QIO dollars:

In a letter sent on Wednesday to CMS Administrator Mark McClellan, Committee Chair Chuck Grassley (R-Iowa) requested detailed reports on travel and expenditures for agency employees who attended conferences since 2003, including two physicians -- Steven Jencks and William Rollow -- who oversee QIO contracts. According to the letter, photographs of one conference site at a beach resort in St. Petersburg, Fla., "suggest a cruise ship atmosphere" and "depict a luxurious resort, lavish dinners, dessert buffets and Hawaiian dance parties -- all in a tropical beach locale." The committee launched the investigation in August 2005 after a Post series reported that QIOs -- private, state-based contractors paid by Medicare to investigate patient complaints and oversee quality of care issues -- often fail to investigate complaints and that some executives receive high salaries and perks.

Hawaiian dance parties? Buffets? Sounds great -- especially when the contracts are for assuring quality in health care organizations. You remember quality, right? As in not causing 100,000 deaths due to medical error every year? Yeah, that.

These days, it sure seems like Abramoff targeted the wrong sector of government industry. Or maybe we have these sunny vacations to thank for the Medicare Part D bill.

States save the day

Some states are picking up the slack in the wake of Medicare Part D's mess:

Massachusetts lawmakers on Dec. 29, 2005, approved a bill that would allow the state to provide temporary assistance with prescription drug costs for state residents enrolling in the new Medicare drug benefit, which began on Jan. 1, the Boston Herald reports. According to the Herald, many Medicare beneficiaries have expressed concern that they do not know which Medicare drug plan best fits their needs. The bill, sponsored by state Sen. Mark Montigny (D), is intended to ensure that beneficiaries who are confused by the different options are able obtain their medications (Heldt Powell, Boston Herald, 12/30/05). Under the bill, the state would reimburse pharmacies for a one-time, 30-day supply of prescription drugs if the medication is not covered under the Medicare beneficiary's new drug plan.

Health policy initiatives at the state level often fly under mainstream politico's radars. But the way policy is implemented in the state is often the difference between receiving treatment or going uninsured. In Medicare Part D's case (refer to my Medicare archive to read about the holes in the bill) Massachusetts' legislation will be immensely helpful. It gives pharmacies and patients extra time to figure out their plan (and until beneficiaries actually started receiving meds you don't know how the legislation is working) and pays for prescriptions in the meantime. But it's still a short-term solution that doesn't require extended financial commitment. Little pain, big gain.

D-day

The Medicare Part D Drug Benefit offically began yesterday. The New York Times reports on the state of things, which is predictably mixed:

Within 10 minutes, Ms. Riney had her medications, having paid $3 for the eye prescription and $8.40 for the thyroid drug. Under her previous coverage, she often had to pay $96 for the same thyroid prescription and as much as $20 for the eye medication.

"I feel pretty good about things today," Ms. Riney said. "I just hope, as I need more medications, that it's this easy. I thought about not signing up for the plan because it was so confusing, but I was paying way too much for my pills. I think I did the right thing."

In Brooklyn, Seth Kaplan, a 36-year-old disabled Medicare recipient, reported a very different experience. He said he had struggled unsuccessfully to get his drug plan to pay for his asthma medication. He said that he and his pharmacist had spent two hours on the phone with the insurer, WellCare, and that he eventually had to pay for the drug with his credit card, at a cost of $191.

"At first, on the phone, they claimed it took Medicare two weeks to confirm my eligibility," Mr. Kaplan said. "Then they said one computer system said I was enrolled and another said I had not applied. Then they said I should pay for the prescription and wait to be reimbursed. I said I couldn't afford to do that."

Ronald J. Chase, pharmacy manager of Miller Drug in Bangor, Me., one of the state's busiest pharmacies, said he had virtually given up on Medicare's computer system and tried instead to call insurers directly. But he said: "The lines are overwhelmed and bogged down. We feel we've been handcuffed. So we give customers a three-day supply until we figure out who's in what plan."

It doesn't help that yesterday was a holiday for a good segment of the work force. But confusion is inevitable when millions of people sign up for new insurance plans (with hundreds of different incarnations) at once. Especially the crop of Part D plans which have a laundry list of ineligible drugs, pharmacies, and payment arrangments. A good portion of the people who showed up at their pharmacy are probably ineligible in one of those categories.

Pharma + Government Representatives = Always Higher Prices. Always

I said it before and I'll say it again: the VA is an outstanding organization that provides top-notch medical services with efficiency and cost-control unmatched in any other major sector of US health care:

Prescription drug prices under the new Medicare drug benefit are considerably higher than the prices negotiated by the Department of Veterans Affairs, according to a study by Families USA, the St. Petersburg Times reports. The study found that the median price difference for a one-year supply of the 20 drugs most commonly prescribed to seniors is 48.2%. The VA plan negotiates prescription drug prices for its five million members, while the 2003 Medicare law prohibits the government from directly negotiating with drug makers to determine prices for the program's 43 million beneficiaries.

I said it before and I'll say it again: the Medicare Part D Drug benefit is a giant sucking sound for taxpayers, whose in-bed-with-pharma(who can resist those cheerleaders, anyway?) representatives negotiated the worst deal for U.S. health care in years.

The survey also found:

A one-year supply of the osteoporosis treatment Fosamax is $493.32 under the VA plan, compared with the lowest available Medicare prescription drug plan price of $709.68;

Acid reflux medication Protonix is $253.32 under the VA plan, compared with the lowest available Medicare prescription drug plan price of $1,080;

Cholesterol-reducing medication Lipitor is $497.16 under the VA plan, compared with the lowest available Medicare prescription drug plan price of $717.84 (Nohlgren [1], St. Petersburg Times, 12/22);

According to the study, "It is very likely that beneficiaries -- and taxpayers who subsidize the Medicare drug benefit -- are paying significantly more than they would" if Medicare negotiated prices.

Why, oh why, oh why, oh why did we let this legislation pass?! Seniors deserve to know what kind of deal they got (and I'll give you hint -- it doesn't follow Wal-mart's dictum).

Medicare Backlash

By Ezra

Looks like Medicare Part D just can't hear a kind word, even among those specifically chosen to say kind words about it:

Stephen Nohlgren writes in the St. Petersburg Times: "While President Bush was in Virginia touting his new Medicare drug plan Tuesday, delegates to the fifth White House Conference on Aging demanded it be overhauled.

"Their paths never crossed.

"Unlike his three predecessors, including his father, Bush will not attend the four-day conference. The administration is well represented there, a White House spokeswoman said.

" 'The purpose of the conference was to develop recommendations for research and action in the field of aging and present a report with their findings to the president,' said spokeswoman Jeanie Mamo. 'The president participated at an event in Springfield, Va., to educate seniors on Medicare prescription drugs and encourage them to sign up with the program.' . . .

"Bush, Republican governors and Republican members of Congress appointed most of this year's 1,200 delegates, which makes the resistance to [the drug plan] particularly striking."

Remarkably, it gets worse:

Larry Lipman and Ken Herman write in the Palm Beach Post: "Rather than embracing the Medicare drug law and Bush's call for private Social Security investment accounts, delegates at work sessions on those issues overwhelmingly rejected those positions.

"In nonbinding position statements developed at conference workshops, delegates called for scrapping the 2-year-old Medicare drug law -- which takes effect next month and relies on private insurance companies to provide benefits -- and replacing it with a government-run program similar to how Medicare covers doctor and hospital care.

"Delegates also vehemently rejected any proposal that would divert Social Security payroll taxes into private investment accounts. Such a proposal had been Bush's top domestic priority earlier this year, but has been largely abandoned since the summer."

When the White House can't rely on hand-picked conservatives to support their proposals, you know that the wheels have not only come off the train, but the resulting derailment crushed a lame duck. Don't get me wrong, Medicare Part D is a bad program, but the backlash it's engendered is really astonishing. Given the level of disgust, the electoral importance of seniors, and the paucity of congressional support for the bill, I'd be surprised to see the current conception of Part D last more than three years.

Two weeks old, and look what you've done

Via La Times seniors were apparently pretty pissed on Turkey day:

Although the sign-up period for the new Medicare prescription drug benefit is barely two weeks old, pressure is mounting in Congress to extend it so that senior citizens can have more time to understand a program many find dauntingly complex.

The registration period is scheduled to end May 15. But lawmakers who have been in their home districts during the Thanksgiving holiday have reported being besieged by elderly constituents.

Healthy Policyites won't be the least bit surprised by this news. If you're new to the site and want to know more info on Medicare Part D (I like to call it Medi-Mess) head over to the Medicare category.

Horrible Legislation Strikes Again!

Via the New York Times, more bad news on the Medicare Part D front:

Bush administration officials say they have received scores of complaints about the aggressive tactics used by some insurance companies and agents to market Medicare's new prescription drug benefit . . . Possible violations reported to Medicare officials in the past few weeks include uninvited door-to-door solicitation of business and misrepresentation of insurance products.

Federal and state officials said they had also received complaints that some insurance agents identified themselves as working for the Social Security Administration or the federal Centers for Medicare and Medicaid Services. Insurers are rushing into the Medicare market, offering drug coverage to 42 million people who are 65 and older or disabled. The new drug benefit is heavily subsidized by the federal government, but will be delivered by private health plans and insurers. Many of the insurers have little experience with Medicare.

These accusations, if true, are the inevitable consequence of horribly designed policy. (For more on the absurdity of the bill, see my posts here and here). If you enact a program that no one understands, certain less-than-moral companies will use illegal tactics to try to get prospective customers' attention (i.e. door-to-door solicitation, pretending to be from SSA or MMS).

When the bill passed in 2003, I was chiefly pursuing pre-med and paying little attention to the hubub around it. Now that the enrollment period has begun and my brain is primarily concerned with policy, I continue to find myself astounded that the senate actually passed this wolf in sheep's clothing of a bill (a wolf who happens to be very, very friendly with PhRMA).

I'm just totally disgusted. Paying for pharmaceuticals is a real problem for millions of people (not just seniors, by the way), and the best our legislators can do is this? A program that no one can even figure out how to sign up for while the companies proffering it employ illegal tactics to entice enrollees? This legislation is just one more nail in the coffin of American-style health care. One day people will look back and think, "Gee, that sure was unnecessary". And that's a damn shame.

Houston, We Have A Problem

As if we all didn't know about the looming disaster with baby-boomers retiring, the New York Times has more on spending cuts in Medicare:

The Bush administration is headed for a clash with the nation's doctors over a federal plan to cut their Medicare fees by 4.4 percent next year, even as the government tries to measure the quality of care they provide.

Doctors say that if the cut occurs, some physicians will be less willing to accept new Medicare patients.

Administration officials said that on Monday they would publish a final rule cutting 4.4 percent from the amount paid to doctors for each service provided to Medicare patients in 2006. They said the cut was required by a formula in the Medicare law. But doctors pointed out that President Bush had not proposed any specific legislation to avert the cut.

In a report to Congress in April, Medicare's trustees said the formula would produce cuts totaling roughly 25 percent from 2006 to 2011, while doctors' costs are expected to rise 15 percent.

Yeah, a 25% cut in physician fees for Medicare is really not going to fly for long.

Useful Stuff for Part D

If you want to know more about Medicare Part D, Kaiser's got an excellent list of resources.

The Good, The Bad...

I promised more on the Medicare drug benefit this week so I think it's time to revisit. Fortunately my wonky contact at The Century Foundation, Leif Wellington Haase, has penned a "Good and Bad and Ugly" overview of the new benefit. We're optimistic people around here, let's start with highlights of the good:

• No state, even sparsely populated Alaska, has fewer than eleven drug plans. States such as California and New York feature more than forty choices.

• Premiums are on average about 14 percent lower than anticipated. Every state in the continental United States will have at least one drug plan with a monthly premium below $20.

• According to a recent study by PriceWaterhouseCoopers, beneficiaries with incomes of $14,500 or less (150 percent of the federal poverty level) will save 90 percent in out-of-pocket costs under the new coverage.

That's some serious relief for people who need it; it's also good to know everyone gets to choose from at least 11 plans. Of course, those choosing from 40 plans have a difficult road ahead of them. So what's the bad?

• Even though the efforts at educating beneficiaries have been strong, they have been plagued by troubling glitches. After the government released its online plan comparison feature last week—itself well behind schedule—it failed to include the prices plans will charge for specific drugs. This makes it difficult or impossible for older Americans to make educated choices about whether to join a plan, or which one to select.

• Medicare beneficiaries are still reluctant to sign up. A Gallup poll released in early October showed that over half of Medicare beneficiaries didn't plan to sign up for a prescription drug plan. Fewer than a quarter said that they would definitely join the program.

Beneficiaries not signing up is a bigger deal than meets the eye. That's because insurance companies are spending enormous amounts publicizing their plans, and insuring for drugs is not a very profitable way of doing business (one reason so many plans have dropped drug coverage in recent years.) If this plan fails and the various plans go under, it'll send shockwaves through the system, disrupting the costs of HMO-Medicare plans, and it could encourage even more companies to drop drug coverage. The immense complexity of the system is acting as a huge disincentive to sign up, and so far there are too few effective measures forming bridges over those troubled waters.

Unfortunately, it gets even worse:

• Beneficiaries who sign up for a drug plan after May 15, 2006 will face substantially higher premiums.

This is an essential point to realize about the new benefit -- if you are eligible and don't sign up, you are charged 1% more every month you don't sign up, for the rest of the time you're enrolled in Medicare part D. That means if you wait a year, you will pay 12% higher than the average plan cost. If premiums rise, so will the amount you're penalized. According to the Chicago Tribune, seniors who wait four years before signing up may end up paying almost 50 percent more for the rest of their lives. That's quite a penalty.

It's just another dimension that makes the new benefit a shameful piece of legislation. If you're going to penalize people for not signing up, make it easier, for God's sake. I'm still shaking my head that this bill ever passed...

Medi-mess

As most of you know, seniors could begin signing up for Medicare Part D yesterday. I have to admit, being young and writing a column targeted towards college students has let this slip under my radar. That is until I was listening to NPR yesterday and Talk of the Nation had two guests discussing the new benefit. It's a scary state of affairs, for both seniors and their kids/grandkids alike who help them decide on a course of action.

My grandparent's six children currently split their pharmaceutical bills every month (which can be no small chunk of change -- $450 last month according to my mom). My mom and I were running some errands when the program came on, and she was insistent (not that I would complain!) on listening to the program so we can figure out what my grandparents should do.

I came away from that program even more confused. And if I'm confused, you know seniors are drowning under the information flood. There are many details essential for consideration that news articles don't discuss. I'll be blogging on them the next few days, so here's to hoping we can understand this better!

For today, it's important to realize the donut-hole nature of these plans. Graham of Over My Med Body! does a great job explaining this:

For the first $2,250, you and Medicare split the drug bill (Medicare pays 75%). After that, for the next $2,850 of drug costs, you, the patient, have to pick up the entire tab. Once $5,100 is reached ($2,250 + $2,850), Medicare kicks back in, paying 95%. People call this donut coverage; you get to eat a bite until you get to the middle, then you get nothing, but then you get donut again once (if) you get to the other side.

So if seniors have exhorbitant prescription bills, they will still have to pay past a certain amount of expenditure. What makes these plans even more frustrating is that insurers can pick and choose what prescriptions are covered. Seniors want to figure out if their plan covers all the drugs they currently take, or they could end up paying out of pocket before the "hole" in the plan kicks in. This is no small task for many couples, especially those with serious medical problems. It's also important for seniors to make sure their plan covers their pharmacy, or if not, that their plan covers another convenient pharmacy.

Am I the only one who feels like it's just plain cruel to do this to people who've lived through the last 65 years? Now that they've finally reached "golden years" we say, "Hey! You want prescriptions! Come here!" and then whack them in the back of the head with a bat. This benefit is a total disaster.